By acquiring these two European platforms TrustBuddy will add SME lending and long-term consumer credit to its existing offering of shorter term consumer credit - thus helping to create a more diversified offering.
TrustBuddy will pay €15.9 million in total for both platforms, of which €11.4 million will be in TrustBuddy shares or vendor loan notes. Both acquisitions remain subject to the meeting of certain conditions. Of particular note, is the condition that Prestiamoci receives a payment services, PSD, license. In order to finance the acquisitions TrustBuddy is considering an equity fundraise but other financing options are possible.
Jens Glasø, TrustBuddy CEO, commented:
“At TrustBuddy, we strive for increased access to European P2P consumer and SME lending markets in order to accelerate future revenue growth. The proposed acquisitions of Prestiamoci and Geldvoorelkaar are clearly in line with this strategy. By implementing our brand new proprietary lending platform for fast, easy and secure lending, TrustBuddy is strengthening its position in highly attractive and rapid growing markets. The acquisitions also bring with them experienced management which complement our existing team’s skills.”
Geldvoorelkaar is the first P2P platform to be issued with a Credit license from the Dutch Financial authority. TrustBuddy has agreed to pay €10.6 million for the Company with a combination of cash, shares and other instruments. It is focused on lending to SMEs and the move allows TrustBuddy to gain easy access into this market. Significantly, TrustBuddy believes that there is huge demand from SMEs for alternative lending sources in the Nordic market, and also in the Netherlands. Geldvoorelkaar has funded €20 million of SME loans this year and has a 60-65% market share in the Netherlands. Unlike many other P2P platforms Geldvoorelkaar is already profitable with its expected earnings for 2014 standing at €0.7 million.
Prestiamoci is an Italian P2P company that is focused on long term consumer loans. TrustBuddy will acquire the company for €5.3 million comprising of cash, shares and options. Prestiamoci relaunched its platform in May 2014 after navigating the complexities of Italian regulation. So far the platform has funded €175,000 loans. This acquisition will allow TrustBuddy to expand its consumer loan offering and adds a product with lower regulatory risk that will bring increased revenue. The acquisition will aid TrustBuddy’s ambition to rollout a consumer loan instalment product in new markets in 2015. It envisages that 80% of revenue from this product will come from the Nordic markets.
TrustBuddy is the world’s only listed P2P lender, having beaten Lending Club to the market by some margin. It is part of the Liberum AltFi Financial Disruptors Index and has traded on the NASDAQ OMX since 2011. These acquisitions will cement TrustBuddy one of the premier P2P lenders in Europe but more importantly it allows it the diversification that should ensure success in the future. The Company’s share price has had a good run in the past year - up 10%, despite an 8% fall in this morning’s trading.